Legg Mason is an Attractive Target, Say Researchers
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Monday, July 27, 2009

Legg Mason is an Attractive Target, Say Researchers

June's wedding season may have passed, but that is not stopping speculation on which fund firms will be the next to pair off. Among the observers filling out a betting card is CreditSights, which is recommending that BNY Mellon should buy another asset manager to be competitive with State Street and BlackRock/BGI.

The independent research group singled out Legg Mason as the "most attractive target." CreditSights' report was picked up by the Financial Times.

"We believe the company (BNY) could look to address the gap in its product mix by acquiring an asset manager with equity products, and we believe Legg Mason is the most attractive target," said CreditSights in its report entitled Scale Acquisitions.

The report noted that Legg Mason's stock has lagged the asset management sector.

"Largely due to the asset managerís performance during the current cycle, BNY Mellon could improve its earnings by almost 15 percent by acquiring Legg," CreditSights' David Hendler wrote.

Reached by The MFWire, BNY Mellon spokesman Mike Dunn said the firm does not comment on rumor or speculation. Legg Mason spokeswoman Mary Athridge said the company does not comment on speculation.

In May, BNY CEO Robert Kelly was quoted in media reports as saying that his company was looking to buy asset managers.

BNY's name cropped up as a possible bidder for BGI, which eventually was purchased by BlackRock. BNY is also thought to be one of the three remaining bidders for Nikki, Citigroup's asset management arm.

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